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Sustainability Disclosure: Proxy Exclusion & the Impact of the SEC's Decision in PNC Financial


On February 13, 2013, the SEC rejected the determination by PNC Financial Services Group, Inc. that, like many companies before it, PNC could exclude a shareholder proposal relating to climate change from its annual proxy materials. Surprisingly to many observers, the Staff found that the proposal did not "deal with matters related to the ordinary business of PNC." The PNC decision comes after a rapid rise in the number of shareholders proposals that have sought greater disclosure from companies relating to climate change specifically and sustainability more generally. The PNC decision is noteworthy because it is a product of the pressures that have given rise to the push for greater disclosure and, at the same time, will likely accelerate them. By rejecting the so-called "ordinary course of business" exception, the SEC opened the door to other shareholder proposals that focus on climate change as well as to any other issue that can be similarly characterized, making the PNC decision emblematic of what is taking place on the broader stage of sustainability disclosure. The Washington Legal Foundation recently published an article co-authored by our Environmental and Corporate attorneys - Jeff Smith, Danielle Sugarman and Robby Stein - which offers a deeper analysis of this decision.

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